Swing Trading: From End of the Month Buying to Pre-Holiday Selling


Stocks finished lower for a second day in a row as the end of the month effect and overbought conditions give away to profit-taking, renewed short selling and ever-present anxieties over the economy. Light pre-holiday trading volumes also made stocks easy to move ahead of the Labor Day Weekend.

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Down three days in a row ahead of its scheduled earnings announcement on Tuesday are shares of VeriFone Holdings Inc (PAY | PowerRating ) . The stock has been trading below its 200-day moving average since mid-July.

Also down three in a row heading into its earnings announcement on Tuesday, Altera Corp (ALTR | PowerRating ) sold-off by more than 3% in Friday's session. ALTR began trading below its 200-day moving average in early August.

Here are 7 Stocks You Need to Know for Tuesday.

Selling accelerated in financials stocks on Friday, setting up severely oversold conditions in stocks like JPMorgan Chase and Co. (JPM | PowerRating ) and Bank Of America Corp (BAC | PowerRating ) when trading begins on Tuesday. Shares of BAC fell by more than 8%.

Industrial stocks like Dow Chemical Co (DOW | PowerRating ) and Caterpillar Inc (CAT | PowerRating ) were also experiencing heavy selling at week's end. Both stocks pulled back by more than 3% on Friday.

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What's up on a down day? Shares of Newmont Mining Corp (NEM | PowerRating ) gained more than 3% in Friday's trading to close at their highest levels of the year. Friday's puts the stock in overbought territory above the 200-day moving average.

News that Starz Entertainment was breaking off content renewal negotiations with Netflix Inc (NFLX | PowerRating ) sent the stock tumbling in afterhours trading on Thursday. Down more than 8% in Friday's session, the stock is back below its 200-day moving average.

Gaining more than 8% and increasingly overbought below the 200-day are shares of Finisar Corporation (FNSR | PowerRating ) . The stock has been trading below its 200-day since mid-May, and has closed higher for five out of the past six sessions.

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David Penn is Editor in Chief of TradingMarkets.com

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Stocks

Referenced Stocks: BAC , CAT , DOW , JPM , NEM

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